FEATURED ARTICLES ABOUT BOOK VALUE - PAGE 2

The stock market crash is defying all conventional wisdom of valuations. Despite the relief rally over last few days, a large no of companies are still trading below their book value which means their market capitalisation is less than their net worth. Put simply, if you could buy these companies at their existing share price and sell their assets in the open market, you could rake in some neat profit. As per an ETIG analysis of actively traded stocks more than half of the companies are trading at prices which are less than their book value.

MUMBAI: In the run-up to the historic 6400 level recorded by the market last week, valuations on the Indian bourses have risen to such an extent that many companies are quoting significantly higher than their book values. ET looked at the stock market performance of the high-profile A group companies to find that of the 197 companies, as many as 152 are quoting above their book value. In fact, 45 of the 152 companies are quoting at a share price to book value ratio of 5 or above, which means that they are quoting five times more than their book value.

HYDERABAD: The book value of his assets may be only Rs 440 crore but YSR Congress President Y S Jaganmohan Reddy is sitting on a treasure trove of Rs 16.96 lakh crore in the form of lands and mines, the Telugu Desam Party has alleged. TDP politburo member and Leader of Opposition in the Andhra Pradesh Legislative Council Dadi Veerabhadra Rao told reporters here today that these assets were not in Jagan's name but in 'benami' including his close relatives and other industrialists.

BANGALORE: Canara Bank's proposed initial public offering of 11 crore shares at a premium of Rs 25-30 per share will be at a hefty discount to the book value. As per the offer document filed by the bank with the Securities and Exchange Board of India (Sebi), the bank's net asset value or book value was Rs 57.84 per share as of March 31, '02. In other words, the proposed IPO would be at a discount of roughly one third to the NAV as of March 31, '02. Incidentally at Rs 16 per share, Union Bank of India's IPO was discounting the book value (Rs 47)

NEW DELHI: The Rangarajan Committee, which looked into aggregate savings in the country, has recommended against switching to a system of estimating corporate savings on the basis of prices prevailing in the market from the one based on book value. "(The) High-level committee feels that savings estimates on (a) mark-to-market (MTM) basis may not be apt as it may lead to wide fluctuations from one reporting period to the next even when the underlying fundamentals do not change," the committee said in its report submitted to the Government yesterday.

While broker shareholders of the Bombay Stock Exchange (BSE) are concerned over the prospects of the exchange amid falling trading volumes, they can take solace from the fact that the exchange's unlisted shares are valued at a substantial premium over the book value. According to a broker, a few thousand shares recently changed hands between two brokers at Rs 207 per share through off-market transaction. The price was 22% higher than the fair value of Rs 169.9 calculated by the exchange to help its members in computing their net worth as on March 31, 2011 and September 30, 2011.

Six ways to chill in a bear market Investing in volatile times MUMBAI: What is a good yardstick for an undervalued stocks in times of crisis such as the current one? The answer to that, many market watchers say, is price to book value(P/BV). Book value is the measure that each shareholder stands to get, were the company to be liquidated. Conventional wisdom suggests that there is very little chance of going wrong if an investor were to put his money in a stock with a P/BV of less than one. Already 21 stocks in the BSE-100 index have seen their price to book value fall below one, as a result of the unprecedented erosion in their stock prices.

Bank stocks have been at the receiving end in the stock market for some time now. Bank Nifty , the sectoral benchmark for the banking sector, has lost around 23.7% in the past year. In comparison, S&P CNX Nifty, the index representing the broad market, has posted a loss of only 15.88% in the same period. Valuations of the banking sector have also taken a beating. The banking index was quoting at 2.77 times its trailing 12 months book value a year ago. Now it is quoting at 2.21 times.

MUMBAI: In the run-up to the historic 6400 level recorded by the market last week, valuations on the Indian bourses have risen to such an extent that many companies are quoting significantly higher than their book values. ET looked at the stock market performance of the high-profile A group companies to find that of the 197 companies, as many as 152 are quoting above their book value. In fact, 45 of the 152 companies are quoting at a share price to book value ratio of 5 or above, which means that they are quoting five times more than their book value.

MUMBAI: Despite solid gains in the broader market, there are several Book value means the value of company's total assets (with goodwill) less the liabilities. Price-to-book value (PBV) is a good metric to value stocks of companies which have large amount of tangible assets in their balance sheet. Going by conventional wisdom, if a company is trading at a price-to-book value of less than 1, the company's assets are either overvalued or it is earning a poor return on its assets.